Winter of Discontent, the contractors practical solution

Since the Summer of 2022, the UK has suffered an endemic of Strikes, from railway workers to teachers to border force officers. Keeping calm and carrying on in the face of adversity caused by strikes has been one of the behaviours the UK public has had to display. Whilst the impacts of strikes have been felt across the economy, resulting in project delays, what options are available to organisations to protect their interests? One question to answer is, does a strike impacting an organisation's ability to deliver a project constitute a force majeure event?

Force majeure translated means superior force, with no clear legal definition in English law. It is often the case that a contract will specify some uncontrollable events and prevent the contract's performance, with it a commonplace that strikes are listed as a force majeure event. A force majeure clause enables performance obligations to be changed or suspended where a usually provides that, where an extraordinary event occurs that is outside a party's control. It should be noted that where a party cannot perform the contract, this could give the other party the right to terminate the agreement.

In most circumstances, a force majeure clause in a contract will only relieve performance obligations where it is impossible to perform the contract, such as an export ban and preventing goods from being shipped out of a country. Where an event makes the contract commercially unattractive, a force majeure clause is unlikely to help. Furthermore, the event must be the sole reason which prevents the performance. It should be noted that each contract is different. It is interesting to read the contract's text as some contracts are more favourable than others.

In the case of a strike, it could be considered a force majeure event if it is beyond the party's control and the party has taken all reasonable steps to avoid the event or the impact. In cases where the party has a relationship with the trade union calling the strike, it is difficult to justify this as being beyond the party's control. The case of Channel Island Ferries Ltd v Sealink UK Ltd 1988 shows that where a party's relationship with a trade union is more remote, there may be a tremendous success at invoking a force majeure clause. Take the recent examples of strikes in the UK, where the trains are not operating due to strike, and an organisation's staff have not been able to attend work, hence productivity has slowed. It could be argued in this case that the organisation could put on a replacement form of transport for their team and utilise home working; hence, there should be no productivity loss, and a force majeure event may not have occurred.

However, when examining the teacher's strikes and an organisation's staff being unable to work as they are required to look after their children, it could be argued that the productivity loss is a force majeure event. It may be an option for the organisation.

If you are struggling with the impacts of the economic climate and are looking for options to improve your position, please reach out to the team at Velocity Dispute Management, who will be happy to assist you in exploring your opportunities.

The content of this blog is intended for for information only and is not an alternative for legal advice. Velocity Dispute Management accepts no responsibility for the actions of another party as a result of this blog or the content of any third party source which this blog refers.